The “feast of the common man”, Chia mining full analysis

Chia, an old project born in 2017, also glows with new fervor under the aegis of the cryptocurrency bull market, becoming a new object of chasing by the crowd in the mining field.

In the field of crypto digital currency, mining has always been a hot topic. As long as you own a mining machine, you can “turn stone into gold” and realize huge profits. Especially during the cryptocurrency bull market, the current shortage of graphics cards in the market and the orders for mining machines that are already scheduled for delivery in the fall reflect the pursuit of this wealth opportunity. Now, Chia, an old project born in 2017, has also gained new fervor with the cryptocurrency bull market, becoming a new target of people in the mining field.

  1. Chia’s “noble aura”

Chia is best known for its three auras: “Silicon Valley Genius Founder”, “Star Investment Institution” and “Green Mining”.

In terms of team background, Chia’s founder is Bram Cohen, the inventor of BitTorrent, the free and open source protocol that once dominated 1/3 of the global network and represented the idea of the earliest decentralized digital sharing economy, which undoubtedly gave Bram a huge aura when he founded the Cina project.

In terms of investment institutions, in 2017, 2018 Chia has received two rounds of funding, the investment institutions include the famous A16Z , Greylock Partners, DCM Ventures, Coinbase and other first-line investment institutions. It is the background of these star investment institutions that makes the market more expectant of Chia’s future performance.

Of course, in addition to the aforementioned accolades, Chia’s unique “green mining” approach is what attracts the most attention.

When Satoshi Nakamoto published his white paper on Bitcoin, his main vision was that everyone could participate in Bitcoin mining through CPUs; however, the competition for arithmetic power based on proof of workload eventually led to Bitcoin mining becoming a competition for professional mining equipment and cheap electricity. Currently, unless an average person has a professional ASCI mining machine, they cannot mine bitcoin; similarly, according to the Cambridge Bitcoin Electricity Consumption Index, the annual electricity consumption of bitcoin has now reached 134.68 TWh, which is already more than the annual electricity consumption of a medium-sized country. This is anachronistic at a time when the world is increasingly concerned about environmental and climate issues.

By contrast, Chia aims to be an alternative to Bitcoin – “a green, eco-friendly digital currency” – and its arithmetic is based on “a widely distributed, ASIC-resistant, electricity-independent commodity – hard disk space. How does Chia achieve its vision? It relies heavily on its Proof of Space and Time consensus mechanism.

Users of the Chia blockchain “seed” their hard drives with unused space by installing Chia mining software. These users are called “farmers”. When the blockchain broadcasts the next block challenge, farmers can scan their plots to see if they have the closest hash to the challenge. The probability of a farmer winning a block is the percentage of the total space of the entire network that the farmer occupies.

Temporal proofs, on the other hand, are implemented to sort blocks in chronological order as a way to form a complete and valid block master chain. Time proofs are implemented by a verifiable delay function that takes some time to compute but is fast to verify. the key idea of VDFs is that they require sequential computation and minimize power wastage since having many parallel machines does not yield any gain.

Perhaps the above terminology is too obscure and complex, let’s go through Chia’s mining process to better understand the time-space proof mechanism.

(1) Plotting phase (P-disk).

The P-disk process is somewhat similar to a farmer sowing seeds (Nonce) on the land (hard disk space), so China graphically refers to this process as “Farming”, and the users involved in Farming are called “farmers”.

(2) Harvesting stage.

Once users have planted seeds on the land, they can sit back and wait for a bountiful harvest. The process is that when a new block is broadcast on Chia’s network, farmers scan their land (hard disk) for seeds (Plot) and obtain a value through a small calculation, and if the value is close to the Target given by Chia, the farmer will be rewarded with Chia coins. During this process Chia gives a “proof of space” that the user has indeed provided a certain amount of land (storage space) for sowing. Similarly, to prevent farmers with large amounts of storage space from attacking the system by creating alternate transaction records, Chia uses VDF (Verifiable Delay Function) to time-order the blocks, thus creating a history of validly completed transactions for the system and ensuring network security. 2.

  1. The “feast of the common man” under Chia

As we can see above, the probability of a farmer winning a block reward is the ratio of the size of his storage space to the total space of the network. Therefore, the more land a farmer has, the higher the probability of getting a reward. Therefore we see that Chia miners are snapping up hard drives in large numbers to expand their land space, which has triggered a wave of hard drive outages and price hikes, which has led to an exponential increase in Chia’s network space all along.

The "feast of the common man", Chia mining full analysis

Figure 1. growth of Chia web space

Source: chiaexplorer, OEE OKEx Research Institute

When Satoshi Nakamoto first designed the Bitcoin mining model, his vision was that everyone could mine with the CPU on their computer. However, with the emergence of hardware devices that specialize in computing, such as ASICs, mining with CPUs has become a distant dream – it is difficult for ordinary people to participate in bitcoin mining because of the lack of dedicated ASIC miners; similarly, Filecoin mining, which is often mentioned together with Chia, requires extremely high configuration of hardware devices, consumes a lot of broadband, and cannot be disconnected from the internet power outage, otherwise it will trigger a penalty mechanism. Therefore, BTC and FIL mining are gradually reduced to a noble mining sport for a few professionals.

And as we can see from above, the key to Chia mining is the size of the storage hard drive space – anyone in the market can acquire this hardware device. Therefore, compared to Bitcoin and Filecoin, Chia has a much lower threshold for mining hardware, and anyone can participate in it and gain Chia revenue.

This is one of the reasons why Chia is currently hot. In addition to the bull market phase, people are not willing to miss the Chia wealth opportunity, thus generating FOMO emotions; moreover, ordinary people can also participate in it, which can be called a “feast for the common people”.

  1. Chia Mining Analysis

Like Bitcoin, the difficulty of work on the Chia blockchain network is also dynamically adjusted to ensure that the block release time remains constant, maintaining an average target time of 10 minutes for every 32 blocks completed, thus achieving a stable release of XCH in the Chia network. On the other hand, with the intensification of competition for P-discs, Chia’s network space will rise, which will eventually lead to a decrease in the reward revenue per unit of “farming space”. As the chart below shows, Chia’s daily XCH rewards per TB have been getting lower and lower over the past half month, and by April 30, only about 0.0076 XCH per TB of storage space was being rewarded per day. With more and more farmers coming in, the number of XCH rewards per TB per day will drop further in the future.

The "feast of the common man", Chia mining full analysis

Figure 2. Number of XCH rewards obtained from 1TB of storage space per day in the Chia network

Source: chiaexplorer, OEE OKEx Research Institute

On the other hand, it should be noted that the network can be disconnected during the P drive, but it takes a very long time, mainly because it takes a long time to write a large amount of Nonce to the disk during the P drive. On the whole, the speed of P disk depends on CPU power and disk read/write speed. the faster the P disk is written, the faster the plowing can be done, then the earlier the farmer can enter the harvesting stage. This means that while some farmers are still stuck in a P-disk time rut, there are already other farmers harvesting XCH in abundance, and the longer the P-disk time, the more network space there is and the less future revenue there is.

Therefore, Chia mining is a game of “race against time”, and the larger the “land area”, the higher the returns for farmers who enter earlier. Since it is impossible to shorten the time required for P-disk, more farmers adopt the strategy of “space for time” – using a large number of hard disks at once to obtain a larger “farming area” in order to reduce the time lost during the “farming” phase of P-disk. “phase.

Overall, Chia is still in the early bonus stage, driven by the FOMO sentiment, Chia’s fire will continue for some time. For users seeking short-term investment, it is a good choice to participate in the program.

Posted by:CoinYuppie,Reprinted with attribution to:
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